Banks provide funding for Phong Dien solar power plant construction

The Vietnam Bank for Agriculture and Rural Development (Agribank) and the Vietnam Development Bank (VDB) have signed a co-financing agreement to provide preferential loans for the construction of the Phong Dien Solar Power Plant in Thua Thien-Hue province.

Construction for Phong Dien Solar Power Plant is scheduled to start in the fourth quarter of 2017 and finish after one year - Illustrative image

Phong Dien Plant is invested by Gia Lai Electricity JSC (GEC) on an area of 45 ha in My Hoa hamlet, Dien Loc commune, Phong Dien district with a total investment of nearly VND700 billion (US$30.8 million). It has a designed capacity of 35 MW and a projected output of about 50 million KWh per year.

Construction for the solar power project is scheduled to start in the fourth quarter of 2017 and finish after one year.

According to the agreement, the reciprocal capital from the investor covers 40% of the total investment. Bank loans are expected to cover 60%, of which, Agribank Thua Thien-Hue and Agribank Gia Lai branches will finance 30% of the total investment, while VDB Thua Thien-Hue and VDB Quang Tri will cover the rest.

At the signing ceremony, the investor committed to comply with the provisions of current laws during the investment process, which will be evaluated by lenders to be effective. This will ensure the ability to repay the principal and interest rate, as well as approved in writing by the upper level banks of each lender.

In addition, VDB Thua Thien-Hue and Quang Tri, as well as Agribank Gia Lai and Thua Thien-Hue, will negotiate on a credit agreement on the basis of market interest rates and the State Bank of Vietnam’s regulations.

GEC is responsible for promptly providing full documents, information and commitments to the project implementation schedule and financial status at the request of lenders to serve the appraisal work for providing loans.

Agribank Thua Thien-Hue branch will work closely with co-financed banks and the investor to complete documents and procedures to sign credit contracts to ensure timely and sufficient capital supply, thus ensuring the project’s completion as scheduled.

Also at the ceremony, VDB branches in Thua Thien-Hue and Quang Tri, GEC and other companies belonging to Thanh Thanh Cong Group signed a cooperation agreement to finance investment in a total of ten solar power projects with an estimated investment capital of VND9.5 trillion and a capacity of 49MW each.